September 14, 2023 at 15:17 GMTModified date: September 14, 2023 at 15:17 GMT
September 14, 2023 at 15:17 GMT

‘Clear heads will prevail’ in SEC wrangles, says Ethereum’s Lubin

Joseph Lubin, co-founder of Ethereum, has said that “clear heads will prevail” eventually, as the SEC continues to chase down crypto firms in the US…

US SEC. Source: Shutterstock

Joseph Lubin, co-founder of Ethereum, has said that “clear heads will prevail” eventually, as the US Securities and Exchange Commission (SEC) continues to chase down crypto companies over whether or not crypto can be considered a security.

Speaking to CNBC’s Capital Connection today, Lubin added: “America will see that decentralized protocols, blockchain, cryptocurrency are aligned with the philosophies of the U.S. And I think much of the rest of the world will follow suit.”

Lubin, who is CEO of the ConsenSys blockchain technology company, said: “I anticipate that, with previous technologies like the internet, the web and cryptography, clear heads will prevail.”

SEC vs crypto

The SEC has been unrelenting in filing charges and pursuing cases against multiple crypto exchanges and projects this year. These include Ripple, the world’s largest exchange Binance, as well as Coinbase and other projects – just yesterday – such as Stoner Cats.

Last June, the SEC filed 13 charges against Binance entities and its founder Changpeng Zhao. The charges included a range of allegations, such as operating unregistered exchanges, misrepresentations of trading controls, and the unregistered sale of securities.

At the Senate Banking Committee last Tuesday morning, SEC chair Gary Gensler argued that almost all digital assets meet the Howey test. This is a legal test that determines whether an asset or transaction can be classified as a security.

Gensler’s prepared testimony, published on 11 September said: “Given this industry’s wide-ranging noncompliance with the securities laws, it’s not surprising that we’ve seen many problems in these markets. We’ve seen this story before. It’s reminiscent of what we had in the 1920s before the federal securities laws were put in place.”

He added: “Thus, we have brought a number of enforcement actions — some settled, and some in litigation — to hold wrongdoers accountable and promote investor protection.”

Meanwhile, the crypto community waits with bated breath to see if the SEC will approve a host of spot Bitcoin ETF filings from bigwigs such as Fidelity, BlackRock and Franklin Templeton.